Companies spend ridiculous amounts of time, resources and energy researching what they’re doing wrong. But they don’t put nearly as much effort into rectifying problems or finding new ways to drive higher revenues.
Several books and studies have been written to demonstrate how companies can use the knowledge they acquire on making things better, but still the knowing-doing gap has not been bridged.
A recent R&D survey from McKinsey, which looked at 1,283 executives from multiple regions, industries and company sizes, found that 80 percent of respondents believe decentralized R&D functions through collaboration is the best way to position themselves to meet goals. Theoretically this puts them in a good position to achieve their fair share of the revenue pie, yet only 63 percent have actually put such practices in place.
MIT Sloan School of Management, in various research projects, has identified a group of what they describe as the “High Performing Innovators” – companies that outperform competitors in areas like organic growth and in-house product development. Three main areas that the high performers focus their energies on are:
- Use of product platforms to accelerate speed to market
- Allocation of talent and capital
Collaboration. Similar to the McKinsey findings, MIT Sloan found that 31 percent of the high performing innovators engage in collaborative product-related decision-making, compared to 20 percent of other survey respondents. These findings suggest that for many companies effective collaborative strategies are still lacking in daily business practices.
Product platforms. A challenge that many companies today are facing is the ever-increasing product complexity that results from more and more product options. Managing this complexity puts huge burdens on organizations, thus taking longer to design products and introduce them to the market. According to the MIT survey, high performing innovators focus on shared product platforms a plan to do even more of this in the future.
A recent post on a LinkedIn discussion forum the benefits of product platforms, summed it up like this: “For many years [I] fondly referred to the [Product Platform] process as the Chinese restaurant process. Ever wonder how a Chinese restaurant can serve any one of (sometimes) hundreds of dishes in a matter of just a few minutes, and the food is hot and delicious? Did they start from scratch? I don’t think so”.
The bottom line, companies who are on top of their diversity challenges are quicker to market, thus capturing more market share than their adversaries.
Allocation of talent and capital. High performers allocate more resources to hiring and are being more proactive towards well-defined growth opportunities. These finding are also supported by a recent study from the Wall Street Journal where most CEOs favored business growth as a top priority across manufacturing, financial and other services with talent management coming in second.
With well-defined growth opportunities, expertise and knowledge stay within a company’s ecosystem. This is paramount to closing the knowing-doing gap. However, companies need to go a step further and not just rely on word of mouth and water-cooler talk to share information. Processes and systems that capture knowledge and help others apply it is an even bigger part of closing the gap.
Is your organization experiencing the knowing-doing gap?